SBA History & Approach

What the SBA and Bank Are Really Doing With These Documents

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“Because the SBA guarantees part of the loan, banks can offer rates that are often half of what business credit cards charge, plus longer repayment terms—this is why SBA loans are considered the gold standard for small business financing.”

The bank does its own underwriting first, but then they send the full file to the SBA for government-level sign-off. The SBA sets most of these requirements—and the bank’s job is to confirm every detail before submitting to them.

• They’re verifying ownership & good standing

• • Making sure the business is 100% U.S.-owned and that any owner with 20%+ ownership is willing to personally guarantee the loan.

  • Confirming the business is active and compliant with state and federal requirements (like Good Standing Certificates, Articles of Incorporation, and licenses)

  
  

  They’re checking financial and legal health

  • Verifying revenue (tax returns and bank statements) to confirm the business can support the loan.

  • Making sure there are no outstanding tax liens or legal judgments that would conflict with the bank’s lien.

  • For larger loans, ensuring proper insurance (General Liability, Workers Comp if required, and sometimes Business Personal Property).

   

• They’re confirming all owners and affiliates are accounted for

  • Collecting IDs and tax info to verify identities and citizenship (or lawful permanent resident status).

  • Checking related companies (affiliates) to ensure there are no conflicts or hidden liabilities.

  • Reviewing operating agreements or bylaws so ownership matches the application.